American Trucking Associations predicted a bright future for the trucking industry in its Freight Transportation Forecast to 2022.
Following the worst recession in the post-war era, the economy and freight transportation are finally growing again. In the forecast report, the ATA said the trucking has a good decade of growth ahead.
Although freight transportation tonnage and revenue retracted a stunning 19 and 18 percent respectively from peak to trough during The Great Recession, the outlook remains bright for all modes. Total freight tonnage is expected to grow 24 percent over the forecast period, with revenues jumping 66 percent by 2022.
The initial recovery, however fragile it may be, got off to a good start in 2010, but still has a lot of ground to cover. The U.S. economy managed to expand nearly 3 percent, and industrial output advanced 5.6 percent. Domestic tonnage rose an estimated 5.8 percent in 2010, which although good, was still around 14 percent below the most recent peak. But growth will continue with total freight tonnage increasing 19 percent by 2022 to 16.5 billion tons per year.
While these overall numbers are good for everyone, trucking as a segment is predicted to outperform other modes in the coming decade.
"Trucking is going to see significantly higher tonnage growth than some of the other modes," said Bob Costello, chief economist at the ATA. "Trucking is also going to see faster revenue growth."
Trucks' share of total tonnage will rise from 67.2 percent in 2010 to 69.2 percent in 2016 and 70.0 percent by 2022. Truck revenue will grow from $563 billion in 2010 to $937 billion on 2022, although revenue share will only grow by 0.2 percent to 81.4 percent.
Rail intermodal will see much higher growth rates in both tonnage and revenue, averaging 6.1 percent and 11 percent respectively over the decade. However, intermodal will remain a very small segment, with only 1.8 percent of total freight volume by the end of the period, and 2.7 percent of revenues.
Playing Catch-Up
Coming out the worst economic climate since The Great Depression, freight volumes have some catching-up to do to reach pre-recession levels. As such, the growth rate in the first half of the decade will be higher than the second.
Total volume of U.S. freight will increase an average of 2.7 percent per year from 2011-2016, and then 1 percent per year until 2022. In the same time frames, trucking will grow 3.3 percent annually, and then drop off to 1.2 percent annually. Costello says this is perfectly normal.
"When you come out of the doldrums, you are going to get some better growth rates," he said. "The 1.2 percent is much closer to the long-run historical trends."
As growth rates flatten out, shipping shares of each mode will continue to be stable, which is great news for carriers.
"Major modal shifts are a thing of the past," Costello said. "Trucking is going to continue to dominate the freight transportation industries."
However, according to Costello, the biggest take away from the report is that all modes of freight transportation have a bright future. If the economic recovery continues as expected, there should be more than enough freight, not to mention revenue, to go around for everyone.
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